Archive for the ‘Eurodollar Options’ Category
He thinks I don’t know the ten-dollar words
May 25, 2022 –Brainard speaks today at 11:15 (Commencement address at Johns Hopkins University). The two-year note plunged in yield yesterday, falling over 14 bps coinciding with yesterday’s auction. Red euro$’s rallied 14.75; the curve steepened as longer maturity yields didn’t decline quite as much, but the ten year note still dropped 10 bps to […]
Outlining the Obvious
May 24, 2022 –Hey Raphael, I loaded up on some Sept call spreads in eurodollars, how about a little something, you know, for the effort? Maybe something like a pause in the hike cycle? Powell makes intro remarks at an economic summit at 12:20 today. –SNAP warned of a deteriorating macro environment, and the share price […]
May 23, 2022 –In my opinion Modern Monetary Theory is working exactly as advertised. I’ve had several conversations with people complaining about one boneheaded government program or proposal after another; they typically close by saying, “And we’re the ones paying for it!” as if they get a specific tax bill for a specific program. That’s […]
Barely Squeakin’ By
May 22, 2022 – Weekly Comment Retail can be a tough business. Consumer spending accounts for 2/3rds of GDP, as we’re often reminded. In any case, retail stocks have taken an absolute shellacking in the past month or so. From April 18 (this year’s tax date) to Friday, May 20, here are some changes on […]
Two short-end interest option trades lean in opposite directions
May 20, 2022 –Yields declined on yesterday’s equity market weakness, with ESM having tested the previous week’s low of 3855; yesterday’s low was 3856. May opex in equities. The ten year fell 3 bps to 2.851%, though TYM2, with a settle of 119-225 was well off the early morning fear-induced high of 120-10. EDZ2/EDZ3 traded […]
The Fed affects demand…for stocks
May 19, 2022 –Ouch! Am I bleeding? DJIA -3.6%, SPX -4.0% and Nasdaq Comp -4.7%. Big retail stocks were hammered. Since last month’s highs WMT -23%, TGT -36% and COST -29%. Oh, is that what Powell means when he keeps saying the Fed can affect the demand side? All of a sudden the tenuous relationship […]
May 18, 2022 –Saw this on twitter: “Wall Street is heading into a summer from hell – a period of extreme volatility that top investors say will bring a near-biblical reckoning.” I like it, Even if it WAS churned out by a bot. I might have modified it a bit by substituting ‘The US’ for […]
Destroy demand by Christmas
May 17, 2022 –Low volume Monday. The ten year yield eased 5.8 bps to 2.873%. New lows in several of the near one-year eurodollar calendars. I’ll focus on Dec’22/Dec’23 which printed -0.5 and settled 0.0, down 6 on the day from Friday; it’s the nearest one-yr to have slightly inverted. In early January, this spread […]
State hoarding
May 16, 2022 –This morning it’s all about China. And Wheat. China’s data was terrible due to covid lockdowns, with April Industrial Output -2.9% yoy. Retail sales -11.1%. The yuan continues to weaken with CNY 6.794. July Wheat is up over 50 cents at 1230. High on March 8 was 1278 1/4; today’s high is […]
Forward growth expectations worsening
May 15, 2022 – Weekly comment Even as inflation data released this week were worse than expected (yoy CPI 8.3%, Core 6.2% and PPI 11.0%) calendar spreads for next year declined substantially on the week. For example, EDZ2/EDZ3 one-year settled at a new low of 6 bps, down from 23 the previous Friday. The high […]
